Long-Awaited Announcement Expected January 11, 2011
Numerous news agencies, including the Wall Street Journal, the Financial Times, NPR and others, are reporting that Verizon Wireless (NYSE:VZ) will formally announce that it will offer Apple’s (Nasdaq:AAPL) iPhone in coming weeks. A news conference has been scheduled for Janary 11, 2011, and while the companies aren’t commenting, reports indicate that invited reporters include several who focus exclusively on Apple products.
While the announcement has been long anticipated, it remains unclear how dramatic the impact of a Verizon iPhone will be on industry subscriber trends. On the one hand, subscribers have long complained about the quality (or lack thereof) of AT&T’s network, particularly since iPhone popularity has led to a dramatic increase in data traffic over the network. On the other hand, Android-based devices, like Motorola Mobility’s (NYSE:MMI) Droid line, have been growing in popularity and market researcher comScore reported on January 6, 2010 that the number of Android users in the US had passed the number of iPhone users for the first time in the three months ended November 30, 2010.
So, just how important has the iPhone been to AT&T? Very. Since the iPhone was launched exclusively with AT&T at the end of June 2007, AT&T has garnered fully 50% of total wireless industry net additions.
Verizon’s wireless growth accounted for another 34%, leaving just 16% for everyone else providing wireless service in the U.S. (based on publicly-traded companies). In the third quarter, AT&T added more than 2.6m subscribers versus Verizon’s 1.1m; everyone else shared about 750k…
Family plans and contract obligations will prevent a wholesale defection of iPhone subscribers from AT&T but we figure over the next two to four quarters Verizon—with its ‘best in the nation’ network—will see a marked improvement in its share of net adds. But it might be the “all others” category that suffers the most.